ACR NEWSLETTER

Maine Partially Removes Cap on Charitable Contributions

Philanthropists, foundations, and other charitable organizations continue to fight against harmful legislation that curtails private charitable giving. Hawaii, North Carolina, Missouri, Montana, and Kansas are just a handful of states who have acted within the last year to pass legislation that would positively impact charitable giving. For example, Hawaii Governor Neil Abercrombie signed a bill last July that eliminated a cap on charitable deductions that had been in place for two years. Maine is the most recent state to take action.

In 2013, the Maine legislature enacted a $27,500 cap on all itemized deductions, including the charitable deduction. According to the Maine Association of Nonprofits (MANP), the Maine charitable sector stood to lose $20 million a year in charitable giving due to the cap. Maine nonprofits, led by MANP, jumped into action to support legislation—LD 1664: An Act To Encourage Charitable Contributions to Nonprofit Organizations—which would carve the charitable giving deduction out of the overall cap. After a lengthy legislative process, a compromise was eventually reached to ensure passage of LD 1664.

The revised version of the bill would:

Keep the cap through tax year 2015;

Allow taxpayers to deduct an additional $18,000 in charitable donations for tax year 2016;

Remove the cap on charitable giving entirely in 2017.

The bill passed both houses of the Maine legislature on April 17 and became law without the governor’s signature on April 30 (when the legislature is in session, passed legislation must receive a signature or veto by the governor within six days of passage or the bill becomes law). MANP expressed gratitude on its website to “all the nonprofit leaders and philanthropists who made phone calls, testified, sent e-mails, and lobbied in the State House. Without these efforts, the bill would not have cleared even the first of many hurdles it passed to become law.”

Despite the steps in the right direction, MANP has stated it will continue the fight to preserve the full charitable deduction in Maine.

“Next year, we will be working to for an even better solution and we look forward to working with all of you again,” MANP wrote on its website.